Are you drowning in debt? While there are different ways to reduce it, one of the most effective options is to consolidate your debt. While it won’t exactly erase the debt, debt consolidating can provide several benefits, such as lower interest rates, fewer fees, and one monthly repayment. When choosing a debt consolidation company, here are some helpful tips for selecting the right one to help you get back in the black:
1. Compare interest rates of several companies
Unfortunately, many of us have the notion that finding the debt consolidation company with the lowest rates will result in finding the “best” company. Interest rates count. Yes, you should also consider an array of other issues before choosing a particular company. That said, a comparison of different debt consolidation companies wouldn’t be complete without comparing the interest rates they offer. In particular that’s because you’ll be charged a single interest rate from one company, instead of multiple interest rates from multiple companies. Thus, it’s crucial that you find a company that charges a reasonable rate of interest.
2. Read all paperwork carefully before signing it
If you have any questions-ask them, and if you’re uncertain about details or “legalese” in the paperwork-ask an expert. Never sign any paperwork until you’re 100% certain about what you’re signing.
3. Select a payment plan that suits you best
Since everyone has difference sources of income, it’s important to choose the right payment plan. Do you get a paycheck weekly, bi-weekly, or even monthly? Considering such issues will help you to choose a payment plan from a debt consolidation company, which is perfect for you. Keep in mind that even after consolidating your debt, making your repayments will be crucial to erasing your debt sooner rather than later. Selecting the right payment plan can help.
4. Be wary of scams
One of the unfortunate realities when choosing a debt consolidation company is that some of them are unethical. To avoid scams, look for red flags indicating that a particular company might likely be in the business of scamming-rather than the business of helping. Some signs of scam artists include:
- high fees
- limited contact information (i.e. only e-mail)
- confusing or conflicting information
- up-front payments
- no customer service center
If a company has one or more of these features, then you should definitely consider taking your business elsewhere. When you’re in the process of consolidating your debt, the last thing you want to do is to fall deeper into debt unnecessarily.
5. Do your homework
Before choosing a particular debt consolidation company, do some checks. Has anyone you know done business with them? Are they registered with the Better Business Bureau-and if so, what’s their track record? Are reviews of the company mostly positive or negative? Finding the answers to such questions will help you to choose the right debt consolidation company.
6. Consider a company’s customer service
When comparing different debt consolidation companies, it’s important to consider how much customer service they provide. Whether or not the company has a customer service center is one of the best indicators about whether or not the company is making a conscious effort to provide the best service available to its customers.